Europe Cools Off -- AC on 60% of new cars, a big jump

Not long ago, those who couldn't take the heat were advised to leave the kitchen. Today, the American response is to simply get air conditioning, in your car, home, office, even your tent, for swanky catered outdoor parties.

While the U.S. generally takes some lifestyle cues from Europe, in the realm of air conditioning it's the Americans setting the pace. Some Europeans still resist the trend (and even consider it unhealthy), while others embrace it like an ice pack on a sweltering day.

The automotive AC market is a prime example. The most successful European luxury brands, BMW and Mercedes-Benz, could not even be purchased in the U.S. with factory-installed AC until the late 1980s.

BMWs and Mercedes arriving in the U.S. were fitted with aftermarket AC units installed by the Behr Group, a German supplier.

The contract, beginning in 1983, served as Behr's introduction to the North American AC market, but it wasn't until 1995 that Behr launched a strategy to target the worldwide light vehicle AC market. Until that time, most of Behr's AC business was directed at heavy trucks.

But Behr doesn't need to look beyond its home market for the hot spot for AC. European car buyers are opting for AC in unprecedented numbers across virtually all vehicle segments.

In the late 1980s, roughly 10% of new cars sold in Western Europe were equipped with AC; today, the figure is closer to 60%. In Eastern Europe, the AC penetration rate has jumped from near zero in the early 1990s to about 15% today. In the U.S., 97% of new cars were equipped with AC in 1998.

Delphi Automotive Systems and Visteon Automotive Systems have tapped the European AC market as a perfect opportunity to expand their sales to customers other than General Motors Corp. and Ford Motor Co., respectively.

Other suppliers increasing output to meet growing demand include Europe's segment leader Valeo SA as well as Magneti Marelli SpA and Denso Corp.

Delphi's annual AC production in Europe hovered around 500,000 units in the mid 1990s, has climbed to about 700,000 for this year and will top 1.2 million units by about 2004, says Tim Richards, director of European operations for Delphi Thermal Systems.

The new business nudges Delphi closer to reaching its goal of 50% of sales outside GM-North America by 2002.

Delphi's plant in Donchery, France, which produces condensers and cooling modules, has been reconfigured for a new AC assembly line for a French vehicle maker in 2000. The plant also supplies the HVAC module (heating/ventilation/air conditioning) for the high-volume Opel Astra, which is expected to reach 100% AC penetration within three years.

So what's driving this AC boom? Is it indeed hotter in Europe than ever before?

Global warming research confirms that the Earth's average temperature in 1998 easily was the highest dating back to at least 1860. But climate data specific to Europe is more elusive.

The Meteorological Office, the British equivalent to the National Weather Service, reports that hot spells are lasting longer than they used to. In addition, the U.K. posted its record hottest temperature of 99 degrees F (37 degrees C) just nine years ago, and some Italian islands recently reported all-time highs around 111 degrees F (44 degrees C).

Then again, maybe European drivers are just tired of sweating out big-city traffic jams. The option cost for AC has come down from well over $1,000 to a more reasonable $700. In addition, compressors are becoming more efficient and drawing less engine power, which is attractive to people who routinely pay more than $4 for a gallon of gasoline.